May 2014 Newsletter

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Student Loan Rates: What to Expect in July

In 2013, Congress passed the Bipartisan Student Loan Security Act, which ties federal student loan interest rates to the 10-year Treasury note. The 2014 auction rate yield increased from 1.812% to 2.612%. As a result, interest rates on Federal Stafford and Federal PLUS loans taken out from July 1, 2014 to June 30, 2015 will go up.

This table summarizes the rate changes for each type of loan:

2014-2015

Interest Rate

2013-2014

Interest Rate

Stafford Undergraduate

4.66%

3.86%

Stafford Graduate

6.21%

5.41%

PLUS

7.21%

6.41%

This table shows the impact of the rate increase for a $10,000 loan with a 10-year repayment term:

Stafford

Undergraduate

Stafford

Graduate

PLUS

Monthly Payment

2014-2015 Rate

$104.41

$112.08

$117.19

2013-2014 Rate

$100.58

$108.08

$113.09

Total Payments

2014-2015 Rate

$12,529.37

$13,449.36

$14,063.24

2013-2014 Rate

$12,069.73

$12,969.70

$13,570.87

Total Interest Paid

2014-2015 Rate

$2,529.37

$3,449.36

$4,063.24

2013-2014 Rate

$2,069.73

$2,969.70

$3,570.87

Annual Payments

2014-2014 Rate

$1,252.94

$1,344.94

$1,406.32

2013-2014 Rate

$1,206.97

$1,296.97

$1,357.09

This table summarizes the numbers in the table above:

Stafford

Undergraduate

Stafford

Graduate

PLUS

Increase in Total Payments

$459.64

$479.66

$492.37

Increase in Annual Payments

$45.96

$47.97

$49.24

% Increase in Monthly Loan Payment

3.8%

3.7%

3.6%

$ Increase in Monthly Loan Payment

$3.83

$4.00

$4.10

Ask the Edvisor: Your Questions, Answered

This month we received this excellent question about paying for the upcoming school year:

Question: We have received our first bill from the college I will attend in the fall. My parents and I are trying to budget our college payments for the coming academic year. How should we prioritize spending our college savings? Is it better to spend my assets or theirs first?

Party On!

The Launch Party continues…and we’re still celebrating the cool new look of ScholarshipPoints.com by offering a $10,000 Launch Party Scholarship drawing. Spend as many points as you want on this scholarship before midnight Pacific on May 25, 2014. The more points you spend, the more chances you’ll have to win -- thanks to your ScholarshipPoints.com membership. The winner will be announced on May 26, 2014.

5/29: A Good Day to Save Hard

May 29th is National College Savings Day. A 529 plan is a state-sponsored savings and investment program that lets you save on your federal income taxes when funds are used for qualified higher education expenses. Some states offer special incentives for opening accounts at this time of year.

The Seven Scholarships

This monthly section of Financial Aid News features an intriguing list of seven scholarships that share a common characteristic. We hope this section will make you smile and inspire you to apply for more scholarships.

Featured Scholarships

This month we are highlighting scholarships from the ScholarshipPoints program. To enter, simply log in to your account and spend your points on these drawings before midnight Pacific on the date indicated:

Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans. Loan offers from participating lenders that appear on our websites are not affiliated with any college and/or universities, and there are no colleges and/or universities which endorse Edvisors’ products or services. Lender search results do not constitute an official college preferred lender list. Edvisors receives compensation from lenders that appear on this site. This compensation may impact the placement of where lenders appear on this site, for example, the order in which the lenders appear when included in a list. Not all lenders participate in our sites and lenders that do participate may not offer loans to every school.

Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid. Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with our school or lender directly for information related to your personal eligibility.

Edvisors has endeavored to provide accurate information. However, the results provided by lenders are for illustrative purposes only and accuracy is not guaranteed, as such, Edvisors assumes no responsibility for errors or omission in the information provided.